Sorry, we were very late tonight, but I needed to have some DJX adjustment alternatives ready in case we have to move. This is the first time our DJX position has been in this situation, we'll see how it plays out.

In the meantime, here is the Watch list and some exit Adjustments we might have to eventually deal with, if not tomorrow, sometimes early next week. But we will see.

DJX TRADE ADJUSTMENT ALTERNATIVES IF WE DO NOT GET OUR FOLLOW THROUGH TO THE DOWNSIDE TOMORROW, BE prepared to act if necessary
If you have the current DJX position on, there are some adjustments that can be made depending on how far you wish to roll out the position and to what extent you want to try to limit your losses.

In addition, there are several alternatives available as well using the double up alternative ( and you will need addition margin available to use these alternatives )
The 1st alternative:

Buy to Close out the current Aug 90 Calls ( $1.32 approx. )

Sell to Close out the current Aug 92 calls ( $2.40 approx. )

NET DEBIT: $1.08

Roll the position up to:

Sell to Open the Aug 94 Calls ( .63 approx.)

Buy to Open the Aug 96 Calls ( .27 approx. )

NET CREDIT: .36

NET LOSS on a 50 contract position would be $1.08 - .36 = NET LOSS of .72

If the DJX closes by the August expiration below 94. In addition you would also keep the net credit on the original iron condor of .13 if the DJX closes between 96 and 65 at the August expiration, thus reducing your loss an additional .13

NET LOSS .72 - .13 =

NET LOSS of .59 times 50 contracts or the number you originally traded.

NET LOSS = $2,950 at August expiration.

RECAP OF POSITION


The 2nd Alternative is to

Buy to Close out the current Aug 90 Calls ( $1.32 approx. )

Sell to Close out the current Aug 92 calls ( $2.40 approx. )

NET DEBIT: $1.08

Roll the position up and out to September:

Sell to Open the Sep 94 Calls ( $1.47 approx.)

Buy to Open the Sep 96 Calls ( .87 approx. )

NET CREDIT: .60

NET LOSS on a 50 contract position would be $1.08 - .60 = NET LOSS of .48

If the DJX closes by the August expiration below 94. In addition you would also keep the net credit on the original iron condor of .13 if the DJX closes between 94 and 65 at the August expiration, thus reducing your loss an additional .13

NET LOSS .48 - .13 = .35

NET LOSS of .35 times 50 contracts or the number you originally traded.

NET LOSS = $1,750 at August expiration put position and September Call position both expire worthless

RECAP OF ALTERNATIVE #2:


In addition, we may be able to put on a September put spread if the market pulls back and reduce the loss even further.

However, remember both of these trades will only POTENTIALLY reduce your losses. The market still has to work in our favor, meaning we could be faced with another series of potential losses if the marekt continues to carry up over the DJX index price of 94
.

The 3rd Alternative ( which will require twice as much margin ) is to roll out either of the above positions and Double the number of contracts committed to. ( e.g if you initially did 50 contracts , you now do 100 contracts

The August position: (which was alternative #1 doubled ) would yield the following if the DJX closed between 94 & 65 at August expiration

Buy to Close out the current Aug 90 Calls ( $1.32 approx. )

Sell to Close out the current Aug 92 calls ( $2.40 approx. )

NET DEBIT: $1.08

Roll the position up to the following with 100 contracts, instead of just 50 contracts

Sell to Open the Aug 94 Calls ( .63 approx.)

Buy to Open the Aug 96 Calls ( .27 approx. )

NET CREDIT: .36, but it is on 100 contracts not 50, so your net credit is now .72 ( twice as much )

NET LOSS on a 50 contract position would be $1.08 - .72 = NET LOSS of .36

If the DJX closes by the August expiration below 94. In addition you would also keep the net credit on the original iron condor of .13 if the DJX closes between 96 and 65 at the August expiration, thus reducing your loss an additional .13

NET LOSS .36 - .13 = .23

NET LOSS of .24 if DJX closes between 94 & 65 at August expiration.

NET LOSS = $1,150 at August expiration.

RECAP OF ALTERNATIVE #3:


The 4th Alternative is to do the (2nd Alternative in September and do 100 contracts, as in Alternative #3

Buy to Close out the current Aug 90 Calls ( $1.32 approx. )

Sell to Close out the current Aug 92 calls ( $2.40 approx. )

NET DEBIT: $1.08

Roll the position up and out to September: ( But instead of trading 50 contracts we roll out with 100 contracts.

Sell to Open 100 of the Sep 94 Calls ( $1.47 approx.)

Buy to Open 100 of the Sep 96 Calls ( .87 approx. )

NET CREDIT: .60 ( instead of .0 we get twice that amount or Net credit of $1.20

NET LOSS on the 50 August contract position would be $1.08 - $1.20 from Septebmer position = NET GAIN of .12

If the DJX closes by the September expiration below 94 you are .12 to the good. In addition you would also keep the net credit on the original iron condor of .13 if the DJX closes between above 65 (put side )at the August expiration, thus increasing your gain an additional .13

NET GAIN .12 + .13 = .25 GAIN

NET GAIN of .25 times 50 contracts or the number you originally traded.

NET GAIN = $1,250 at SEPTEMBER expiration if the August put position and September Call position both expire worthless

RECAP OF ALTERNATIVE #4

In addition, we may be able to put on a September put spread if the market pulls back and increase the gain even further.

However, remember although this trade can POTENTIALLY end up with a gain. The market still has to work in our favor, meaning we could be faced with another series of potential losses if the marekt continues to carry up over the DJX index price of 94 by September. In addition, we would now be faced with the prospect of rolling 100 contracts out or taking another loss. However, we do not have to stay in this trade to expiration.

If the DJX pulls back far enough we will be able to close out the calls and at lease reduce our loss or depending on how far the DJX drops ( if it drops ), we might still make a small profit.

This is the outline for tomorrow, depending on if we get the follow through to the downside that we were getting at Thursdays close.
. If we go higher and do not get the retreat or sideways movement look for instructions to roll the position up in August or Up and out to September.

The alternative should be based on your risk tolerance and available margin, if and when we have to move.

The trades have been layed out for you so if case we have to go tomorrow or in the future we will be ready.

If anyone feels they need to move sooner they may, or if anyone just wishes to close out the position and not decide to utilize the roll out, they can also just take the loss by closing out the Aug 92-94 call spread, however that could be well over $7,500 if we do not get a pullback, but that is an alternative as well.